Canada nixes Netflix levy

Online content providers won't have to fund local shows

MONTREAL — Canada’s media watchdog ruled Wednesday that it will not force web players like Netflix to cough up cash to support local programming, bringing them in line with levies on broadcasters.

Earlier this year many in the industry — including top broadcasters — had urged the Canadian Radio-Television and Telecommunications Commission to make web players pump some of their revenue into Canadian-content.

But after going on a fact-finding mission, the CRTC said in a statement there was no evidence that viewers were reducing or cancelling TV subscriptions to switch to web services.

Rather the CRTC believes that “online and mobile programming appears to be complementary to the content offered by the traditional broadcasting system.”

Video-streaming service Netflix bowed in Canada a year ago and has over 1 million subscribers.

The CRTC came to the same conclusion two years ago, saying at the time that there were no business models in place for web broadcasting, although it conceded this time around that business models do now exist.

The broadcasters are unhappy because they have to pay millions to help support the production of local TV programming while Netflix doesn’t have to shell out a penny.

But Canadian producers take comfort from the fact that the CRTC is not letting the broadcasters ditch the payments because of competition from web broadcasters.

In a statement, the Canadian Media Production Assn. said it was happy that the CRTC was aware of the competition from the web companies and that it recognized that “reducing broadcasters’ current Canadian programming obligations is not the solution.”

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